Oil giant Chevron says that it had obtained video recordings — and has posted them on its website — that appear to show an Ecuadorean political operative seeking $3 million in bribes, in connection with a $27 billion lawsuit the company.
It is the latest wrinkle in the on-going class action lawsuit brought by dozens of Ecuadorean communities against Chevron. The tapes supposedly implicate the judge in the case and President Correa’s sister, but as several newspapaers point out, they do not show if the bribes were paid or even if the judge and the sister even knew of the bribes. Chevron says it did not pay for the recordings. It’s hard to know what to think: political corruption versus oil profits.
The background of the case, Aguinda vs. Texaco Inc., is pretty straightforward and well-known: for more than 20 years — until 1992 —Texaco oversaw the extraction of oil from Ecuador’s virgin rain forest. They made a colossal mess. And they are being sued because of it. Similar awful situations exist in Nigeria, today’s China, — dozens of other places — and of course, the US.
But this particular situation gets murky. There is ample, more than ample, documentation that the Ecuadorean government was aware of these problems and in fact worked very, very hard to facilitate Texaco’s operations in the rain forest. The government often put extreme pressure on the indigenous people and, when they did not acquiesce, it ignored their wishes. According to The Economist, from the mid-1970s, the Ecuadorean state-owned oil company (now Petroecuador) had a nearly 2/3 stake in the field, with Texaco overseeing operations. It’s hard to imagine Ecuador was unaware of the contamination. In 1992, the government did not renew Texaco’s contract and the company left everything for Petroecuador.
In 1993, lawyers representing 30,000 local people filed a suit against Texaco in New York City court, claiming damage to the environment and people’s health. In the face of public outcry, Texaco agreed to clean up the pits. It cost $40 million, was completed, and signed off on by the Ecuadorean government. (The Economist says too, Petroecuador was supposed to clean up the rest of the mess, but apparently has not done so and seems to be still using some of the contaminated dump sites. And there have also been questions raised whether Texaco’s work was done right or even at all.)
In 1999, Ecuador passed environmental regulations, but they were not retroactive. In 2001, Chevron bought Texaco and inherited the problem.
“The case is historic by several measures. Never before have indigenous peoples brought a multinational oil corporation to trial in their own country. Moreover, a victory would mark a turning point in the relations between native populations around the world and the foreign corporations that do business in their homelands.
Texaco discharged more than 18 billion gallons of waste water into rivers and streams, burned millions of cubic meters of natural gas without proper emissions controls and spilled millions of gallons of crude oil directly into the earth, polluting the water”, according to the LA Times
It sickened residents including 1,400 people in the region who died of cancer possibly caused by toxic chemicals.
The suit seeks $27.3 billion in damages. $9.5 billion will go to compensation for the cancer deaths; $8.4 billion is for “unjust enrichment”; the remainder is for environmental clean-up.
The case was dismissed in the US appeals court, and sent back to Ecuador. The Ecuadorean judge in the Lago Agrio district, Juan Nunez, seems sympathetic to the local people. “This is a fight between a Goliath and people who cannot even pay their bills,” Mr. Nuñez, 57, said to The New York Times in an interview in his office, where more than 100,000 pages of evidence were stacked to the ceiling. He was also seen on “60 Minutes” expressing similar sentiments.
But the Ecuadorean government has a lot to answer for too. And as The Economist points out,
“Texaco’s total profits from its operations in Ecuador were only $497m, while over the 20 years to 1992 Ecuadorean governments received $25.3 billion in profits, taxes and royalties from the field.”
Increasingly it seems that oil (or other multinational) corporations are sued for very real damages, but ones where the national governments are also partially liable. Perhaps it seems to the plaintiffs that they will get farther if they sue a multinational rather than their own government (if they even legally can); or perhaps they think that since oil companies have a low reputation and deep pockets, it’s easier to go after them alone; or perhaps they have greater hope for a case that gets started in a Western courtroom (as with the Ken Saro-Wiwa case from Nigeria in New York). But the governments of many resource-rich countries seem only too happy to let the multinationals assume full responsibility.
It is not that the multinationals are not responsible for what they did — everyone has always known such dumping was an environmental catastrophe (even before the term was coined), and that the people of the area were angry and exposed to waste that could poison them. But the corporations did not do it alone, and the governments that let them ought to at least recover compensatory money from those nationals who enriched themselves one way or another on the misfortune of their countrymen.
